Babcock & Brown Infrastructure; BBI - Euroports - Antin Infrastructure ...

Babcock & Brown Infrastructure; BBI - Euroports - Amended Sale Agreement
861 words
28 July 2009
01:18
New Zealand Exchange Company Announcements
NZXCOM
English
Copyright (c) 2009 New Zealand Exchange Ltd ( http://www.nzx.com)
Babcock & Brown Infrastructure (ASX: BBI) announces today that it has agreed revised terms to the
Share Subscription Agreement dated 22 December 2008 ("SSA") pursuant to which a consortium of
investors consisting of Antin Infrastructure Partners (acting in its capacity as manager of Antin
Infrastructure Partners FCPR) ("Antin IP") and Arcus European Infrastructure Fund I ("Arcus") have
agreed to invest in Euroports. On completion of the amended Share Subscription Agreement (the
"Amended SSA") (which replaces the SSA), Arcus and Antin IP will hold equity interests in Euroports of
14.1% and 19.9% respectively. In addition, Antin IP will hold a convertible bond in Euroports which, if
converted, would convert into a further 5.97% of the equity in the Company, leaving BBI holding a 60%
interest. The other key changes to the investment under the Amended SSA are:
- A further capitalisation of the company by all shareholders
- Creation of a significant capital reserve at the Euroports level to meet any future Euroports
liabilities/obligations in the short to medium term
- A share equalisation process in 2012 and 2013 based on the performance of Euroports through to that
time. Depending on Euroports performance, the aggregate equity owned by Arcus and Antin will be
adjusted from the potential up-front 40% holding to an amended holding of between 34% and 65% (to
be held as between Arcus and Antin on the same proportional basis of the up-front holding assuming
Antin IP converts its convertible bond into equity).
In addition to the Amended SSA, BBI has secured agreements with other relevant parties to ensure:
- Euroports will move to 100% ownership of its two key JV assets being Benelux Port Holdings (the
owner of Manuport, Westerlund and Magemon in Belgium) and BBI Port Acquisitions Luxembourg (the
owner of TPS in Spain and WCT in Belgium).
- Following completion of the Amended SSA and EU clearance for the increased shareholdings at each
asset level, Euroports therefore will own:
- 100% of Manuport (Belgium and Bulgaria) - 100% of Westerlund (Belgium and France ) - 100% of TPS
(Spain) - 100% of WCT (Belgium) - 100% of Finnish Ports (Finland) - 80% of TRI (Italy) - 50% of SHRU
(Rostock, Germany)
- Completed debt refinancings at BBI Port Acquisitions Luxembourg and Finnish Ports
- Settlement of residual liabilities in Benelux Port Holdings The agreed price under the Amended SSA for
the 40% interest (on a fully diluted basis assuming future conversion of the Antin IP convertible) is
141.5 million which equates to a 100% post investment equity value for the Euroports business of 353
million. BBI will recognise a pre-tax impairment / loss on disposal of approximately 120.0 million. The
final impairment / loss recognised will depend on the finalisation of the year end audited financial results.
All conditions precedent associated with the transaction have been satisfied and as such completion of
the Amended SSA is targeted to occur in late July or early August and a further announcement will be
made in due course.
BBI COO Transport and Chairman of Euroports, Russell Smith said "This revised transaction represents a
significant strengthening of the balance sheet at Euroports creating a strong stable company moving
forward with a considerably simplified structure. This sale, undertaken in one of the most difficult
markets in recent history, balances the value of the underlying Euroports portfolio with the possibility

that the current European recessionary environment could, if prolonged, impact the level of previously
anticipated growth at Euroports over the next four years. We now look forward to working closely with
Antin IP and Arcus as partners in the recapitalised and simplified Euroports to support its growth as a
vibrant and growing business with strong market fundamentals."
Mr Smith said "Having completed the recapitalisation, refinancing and the acquisition of a number of the
minority interests, BBI has no plans to sell down any further stake in Euroports."
Antin Infrastructure Partners Managing Partner, Mark Crosbie said "We are pleased to have reached a
revised agreement with BBI that has considerably simplified the group structure, recapitalised the
business and created a share equalisation adjustment to reflect the future performance of the business
thereby enabling each of us to now focus on future delivery from this unique Continental European port
business."
Managing Partner, Arcus Infrastructure Partners, Mr Toto Lo Bianco, said "We welcome the revised
transaction which ensures financial robustness of Euroports while providing potential upside for all
investors from further growth and synergies across the portfolio."
Euroports
Euroports is one of the largest port operators in Europe and owns a portfolio of port concession
businesses in over twenty strategic locations throughout Europe. The portfolio operates in an unregulated
economic environment, with long term concession agreements and with a mixture of long-term and short
term customer contracts, derives strong and stable cash flows which present good potential for ongoing
growth. For the year ending 30th June 2009 Euroports is expected to report earnings down circa 8% on a
recurring basis against the prior comparable period, thereby showing the benefits of the geographic and
product diversification across the portfolio in one of the most difficult trading environments experienced
in many years.